they had a case that really couldn’t be won, since they were minority shareholders.
Let’s say you have one share of IBM and you go to the Delaware court
and you say, “I want to control IBM; I feel like I’m entitled.” There’s really
nothing holy left in America: religion’s not holy, the family isn’t holy, marriage
isn’t holy, but the only thing that’s really left that is holy to Americans is ownership.
And that’s what the courts are there for. They are there to preserve the
rights of owners of things. So when you go to court and say, “I don’t own this
thing, but I want to control it,” you are almost guaranteed to have a poor
reception.
Eventually, the VCs simply bought my shares, partly so that they wouldn’t
be prosecuted for the next 5 years in Massachusetts court for the looting, partly
because they wanted control of the company, who knows. It was stupid. If they
wanted to buy the company from me and run it however they wanted when I
was sitting in my bathtub reading the New Yorker magazine 6 months earlier,
they could have done it at a lower cost without all this Sturm und Drang, and
everyone would have lived happily ever after. But it never occurred to them
that I would want to do something else with my life. They were very worried
about me competing with them and starting a new company. I had been programming
sitting at a desk for 23 years, working on Internet apps for 10 years—
did they really think that I would take all my newfound money and freedom and
program some more? In fact, I went traveling for a while, and then I went to
flight school and got my private pilot’s license and bought an airplane and went
to Alaska, and all through this time, they were busy losing money.
Livingston: What happened to ArsDigita?
Greenspun: They finally got a call from the bank saying that they were running
out of money in their checking account, I think. That’s when they woke up to
the fact that the CEO and CFO hadn’t been doing a very good job. Partly
because they had burned through about $40 million in cash (I had left them
with about $40 million in cash when I turned over the reins), and they didn’t
understand why. The VCs came in and fired the CEO.
There was a period where I wasn’t supposed to talk about them or the company,
but that’s over. But I think they don’t like me talking about the lawsuit,
because being incompetent and running a company is embarrassing enough,
but being totally incompetent in litigation also looks bad.
I had fostered an atmosphere of caring about end-user experience and